Honing the investor instincts: How grooming of Rishad Premji at Wipro is proving to be a primer

If Azim Premji built the foundation of this business with chief executive Ashok Soota in the 1980s, Rishad is taking Wipro to a newer technology arena.Kunal Talgeri, Jochelle Mendonca&TV Mahalingam | ET Bureau | October 10, 2017, 06:12 IST

The grooming of son Rishad is proving to be a primer on how to hone the investor instincts as the third generation enters a brand new technology arena.Circa 1990. Wipro chairman Azim Premji stood on the stage of the Chowdiah Memorial Hall, an auditorium in Bengaluru that hosts music and theatre performances.

When seen from the bridge that divides Chowdiah Memorial from the waters of Sankey Lake, passersby notice the hall built in the shape of a gigantic seven-stringed violin.

More than 500 inductees of Wipro sat in the audience to hear Premji hold forth on Wipro Beliefs — immovable tenets of an organisation established by his father Mohamed Hashem Premji in 1945.

As the face of the single-largest shareholder, it might have been tempting to see Premji as a conductor preparing his musicians for the orchestra that is Wipro. (Even as of June 30, 2017, the promoter group held 73.18% of Wipro) But he would clarify that straightaway.

The managers and techies would be led by Wipro’s management, who drive the growth mandate. Premji would focus on the organisational framework. For more than a decade since the late 70s, he had personally been involved in hiring managers from other companies and graduates from engineering colleges and management schools. Computers and software, a domestic business, was a fraction of, say, the Rs 50 crore hydraulic solutions company Wipro Fluid Power in the mid 80s.

In October 2006, Premji told an audience at Stanford University in the US: “I think the fact that we were transiting businesses so much made it much easier to move from the so-called ‘family-managed’ company to what we consider a professional company today.” Several top managers who have worked with him in different phases of his five decades as chairman vouch for it.

“He would give responsibilities and then expect you to deliver results,” says a former Wipro president, who asked not to be named. “He wanted to know what was going on, but did not take decisions on our behalf.”

Premji needed the professional managers, as he described in the Stanford address. “One advantage which we had is that we completely turned turtle on our business. We went into information,” Premji said. Wipro was once ‘Western India Vegetable Products,’ a vegetable oil company in Amalner, Maharashtra. In 1966, he was just one term from finishing his engineering degree from Stanford, when he had to return to India because his father passed away unexpectedly.

Premji was barely 21 when entrusted with the organisation. “The initial phase we went through was transforming a very commoditised business, which faced wholesalers, to building a very strong consumer-brand business. This meant it had inputs of branding and distribution,” he recalled in 2006. “We had to recruit professionals to make such a transition easier.”

At Chowdiah Memorial, inductees got the first taste of their role in the journey and learned the ‘Spirit of Wipro’. Its strongest tenet: unyielding integrity.

Premji didn’t want to be the conductor. That was the CEO’s job. But Premji articulated Wipro Beliefs every quarter of every year from the late 1970s to 1995, after which the induction process had to cater to a larger scale of employees around the world. “It was an eventful moment for every newcomer in the organisation,” says Pratik Kumar, chief executive of Wipro Infrastructure Engineering. “As the organisation grew, Premji realised he cannot be the single torchbearer.

This was now about building an organisational culture, expanding from one country to another.” Still, he speaks at leadership training sessions for around 65 senior leaders through the year at the Learning Centre in Sarjapur Road, Bengaluru. It is clockwork—his involvement in articulating the Wipro framework and engagement of the employees—while the board decides on strategy. But in 2007, there was a pivotal induction, of son Rishad Premji.

Most employees of the organisation were not wary of the presence of a Premji scion in their midst, even as Wipro Technologies informed its shareholders in July 2007 of his appointment to hold an office or place of profit as ‘Business Manager’.

It had been preceded by a dialogue with board members and senior managers. “That was crucial for him to understand where the organisation was in that point of time,” says Kumar, group chief HR officer at the time. After all, he had spent a while in the west—finishing an MBA from Harvard Business School before working at GE Capital and Bain & Co.

On induction, Rishad spent nearly four years in the BFS (banking and financial services) division, followed by stints in corporate treasury and investor relations, before he was appointed chief strategy officer in 2010. “He had to step up to what each job required,” Kumar says. “For the role, he would have been competing with others who were there.”

It has come to be seen as a textbook grooming of a successor after experiencing varied business environments. More pertinent to Wipro, the 40-year old has honed his investor instincts. This is critical in keeping ownership distinct from management.

Technology confluence

As executive director and chief strategy officer, Rishad Premji has driven the investments and acquisitions mandate, which has been most apparent in the past two years. The chief strategy officer is a position even founder and chairman of HCL Shiv Nadar has occupied for many years in the Noida-headquartered contemporary of Wipro.

What Rishad has managed to do in this period is work closely with chief executives: Abidali Z Neemuchwala from April 2015, and his predecessor TK Kurien. In the background, the industry is undergoing a metamorphic shift from being a people-outsourcing business to one that demands high technology prowess.

“I have been in this job for little over six years,” said Rishad Premji in an interview to ET in mid-September. “There is so much change and opportunity as part of this change that it’s exciting. We (Wipro) have called out our strategy with Abid (Neemuchwala) over the last couple of years. We are focused on staying the course and are on this journey of executing.”

Managers are used to a commonly marked email from the younger Premji on almost a weekly basis. And they are aware of a shift in the way Wipro is building capabilities because of the trinity of chief executives Neemuchwala, Rishad Premji, and global head of Wipro Digital Rajan Kohli.

Rishad Premji explained the approach. “We have the appetite to be bold – be it organic investments, M&A, bringing in outside talent that thinks and functions very differently. Now, I also want to caveat everything I am saying, by adding that I still see a lot of opportunity in the traditional spend of customers. There will always be enough customers, in enough industries, in enough geographies that will still not be very mature in their global sourcing journey. So, there is still a lot of opportunity in the traditional run business.”

Before heading Wipro Digital, Kohli faced the enterprise market heading the crucial BFS division and as chief marketing officer. Neemuchwala, who was with TCS before Wipro, stands out in terms of operational nous and responsible for the mature business. But it is Rishad who is expanding the playing field for Wipro.

If Azim Premji built the foundation of this business with chief executive Ashok Soota in the 1980s, Rishad is taking Wipro to a newer technology arena, where people – and platforms – are crucial in the age of automation.

The $475.7-million Appirio acquisition in November 2016 is seen as a statement in terms of how Wipro is looking at execution. “Investments like Appirio are getting incorporated in our regular work,” a senior manager says. “Its crowdsourcing platform TopCoder has a registered user base of 1 million, who can be assigned certain tasks or projects, and they come back with the output,” he explains.

Such measures help in augmenting the team, as opposed to investing fulltime Wipro resources, without affecting revenue, the employee explains.

Apart from the acquisitions, Wipro Ventures has been developed as a start-up engagement model through a $100 million corporate venture capital fund. This focuses on cutting-edge startups.

Rishad says the strategy helps Wipro earn the brand permission to play upstream “where we traditionally did not play, at least not at scale.” He cites DesignIT, a strategic design firm Wipro bought – 300 strategic designers largely based out of Europe. “We spent a lot of time figuring out if we could culturally make it work,” he says.

DesignIT had people that get compensated and think very differently from the traditional scaled-engineering model. To make this M&A work, the acquired company should not look down on the downstream business as well. “Today, we have grown those 300 people to 500 strategic designers and, most importantly, we have been able to maintain rates reflective of the value we bring to customers,” Rishad Premji says. “We’ve opened up conversations with a (client) stakeholder we didn’t reach before: the chief marketing officer.”

It sounds like an echo of the ‘String of Pearls’ M&A strategy that Azim Premji ignited in 2005, which had integration challenges. At the time, organic growth demanded management bandwidth.

Acquisitions like Nervewire and Infocrossing never worked out. For Rishad, integration has been the key challenge as more and more industries go digital, and traditional businesses will see growth at slower rates.

“There is no clear startup point and end point, but we will continue on this journey of investment,” he says. For sure, faith in innovation-led IT has not withered for the Premjis.

Azim Premji doesn’t leave a job half done. At Stanford, he completed his engineering degree program through correspondence in the late ’90s. In the 2006 address there he said: “Innovation is not just about incremental improvements in daily operations or one-off brilliant ideas. It is a culture that needs to be created consciously and pursued assiduously by the organisation—always, always nurtured.” In the digital age, the Rs 55,417-crore Wipro is showing just how.